Once again on Monday, at 5 pm Moscow time, the dollar-denominated RTS stock exhchage was shut down to staunch frenzied, panicked selling.
When the Kremlin threw in the towel, the market was down 6% and flirting with crashing through the 600 point barrier, into truly shocking 500-point valuation — close to 80% less value than it had six months ago! The RTS market “closed” at 605, and the MICEX ruble-denominated market was shut down as well, having shed over 5% of its value and actually crashed through the 600-point psychological barrier to close at 560.
The oil & gas index led the way down as oil prices continued their precipitous slide and the value of Russian crude oil slipped well below $50/barrel. LUKOIL was down nearly 12% and so was the once-mighty Norilsk Nickle minerals concern. Sberbank was down nearly 10%. “Oil falling below $50 is a very worrying sign for the Russian budget,” admitted Alexander Zakharov, co-head of equities at Moscow-based Metropol.
Amazingly, the Russian ruble was stable, indicating that the Kremlin was spending its reserves at truly furious rate to keep it that way and giving Russia a fully-fledged Potemkin currency. What happens when the reserves run out, as they will do in less than a year at this rate of spending? Only the Devil knows for sure.
La Russophobe 
I wonder how much the Russian state has spent to date both officially and unofficially to try and prop up the stock market and the ruble. The sad part is that the money would have been much better spent building hospitals or improving Russia’s crumbling infrastructure than pursuing vain economic policies that flatter the hubris of Russia’s political leadership.
LA RUSSOPHOBE RESPONDS:
Well, last week alone the Kremlin admits it spent $16 billion just on the ruble, so that’s $115 for every man, woman and child in the country. It takes an average Russian nealry 30 hours, almost a full work week, to earn that sum, so it’s as if 140 million weeks of work have been debited from the national economy. And it’s worse than it appears, because Russia didn’t bank that money in the first place through work, but rather through getting lucky on the price of oil, so it can’t recoup it by work, only by more luck. If the U.S. is in a recession, no luck will be forthcoming.
I have a question, is this Market crush, ruble devalue and crumbling economic tide started only because of the economic recession in the West? Or did it emerge because the fake economic bubble of Russia started to deflate, in some part after its aggression against Georgia?
LA RUSSOPHOBE RESPONDS:
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